In this exploratory study we take a strategic management approach to global sourcing of
advanced services. We discuss in which ways conventional sourcing differs from strategic
sourcing and what impels firms to aim for the latter (or, prevent them from doing so).
Potentially, strategic global sourcing of services has high returns, but is also associated with
high risks and needs for organizational changes. Strategic global sourcing may therefore be
outside firms’ “comfort zone” – a composite of organizational knowledge transferability,
structural inertia, managers’ risk preferences, and – most interesting in a strategic
management perspective ‐ their ability to mitigate risks of strategic global sourcing. One
important risk reducing measure is internalization of (out)sourced service activities. Many firms
instigate global sourcing via conventional offshore outsourcing. However, as the human asset
specificity of the outsourcing operation increases, firms are pulled out of their comfort zones
and a desire for internalization arises. An illustrative company case gives suggestions as to
how, in practice, internalization may be accomplished without losing valuable human assets
held by the local service providers.

In this exploratory study we take a strategic management approach to global sourcing of
advanced services. We discuss in which ways conventional sourcing differs from strategic
sourcing and what impels firms to aim for the latter (or, prevent them from doing so).
Potentially, strategic global sourcing of services has high returns, but is also associated with
high risks and needs for organizational changes. Strategic global sourcing may therefore be
outside firms’ “comfort zone” – a composite of organizational knowledge transferability,
structural inertia, managers’ risk preferences, and – most interesting in a strategic
management perspective ‐ their ability to mitigate risks of strategic global sourcing. One
important risk reducing measure is internalization of (out)sourced service activities. Many firms
instigate global sourcing via conventional offshore outsourcing. However, as the human asset
specificity of the outsourcing operation increases, firms are pulled out of their comfort zones
and a desire for internalization arises. An illustrative company case gives suggestions as to
how, in practice, internalization may be accomplished without losing valuable human assets
held by the local service providers.